Cancel Medicare Advantage Demo, Says GAO

He also notes that some of the largest health plans in America, such as UnitedHealth Group and Humana, are among the three-star plans. "They will make the investment to get improve their star ratings."

In a statement, an industry group, America's Health Insurance Plans, says the GAO report "provides an incomplete picture of the demonstration project, which AHIP contends "establishes an appropriate transition to the new MA payment system." It cites a study in the January 2012 edition of Health Affairs that foundthat beneficiaries with diabetes in an MA special-needs plan had "7% more primary care physician office visits; 9% lower hospital admission rates; 19% fewer hospital days; and 28% fewer hospital readmissions compared to patients in FFS Medicare."

The GAO is not alone in its criticism of the demo project. The independent Medicare Payment Advisory Commission states in its March 2012 report to Congress that the demo will result in an estimated $2.8 billion in program costs for 2012 versus $200 million in bonus payments under the ACA. "Limited Medicare dollars should go to truly high-performing plans." MedPac reiterates its position that "demonstrations should not be used as a mechanism to increase payments."